UScellular sale to T-Mobile challenged by lawmakers who also want to undo Sprint merger
In May, shortly after T-Mobile bought Mint Mobile, UScellular said it was going to sell a huge chunk of itself to the company for $4.4 billion. The deal would provide T-Mobile with 30 percent of UScellular’s wireless spectrum, as well as its stores and 4 million customers.
UScellular will continue to own 70 percent of its wireless assets. It will keep all of its towers but lease space on 2,100 of them to T-Mobile.
To get regulators to approve the deal, the two companies said that it would lead to better coverage in rural areas. They also said that it would be up to UScellular customers to decide if they want to keep their existing plan or migrate to a T-Mobile plan.
Democrat leaders Sens. Elizabeth Warren (Mass.), Amy Klobuchar (Minn.), Sens. Chris Murphy (Conn.), Bernie Sanders (Vt.), Cory Booker (D-N.J.), and Richard Blumenthal (Conn.) fear that the acquisition would raise costs for customers and restrict choices.
Additional consolidation in the market would have far-reaching effects, reducing choices for consumers, further concentrating wireless spectrum holdings, and potentially leading to higher prices and other harms for consumers across the country.
Democrat senators, July 2024
Warren and Klobuchar were also against the T-Mobile and Sprint merger, which was approved in 2020 and is believed to have stifled competition and raised prices across the wireless market.
In their letter to the DOJ and FCC, lawmakers have also expressed a desire to have that merger undone. They argue that the merger raised prices for customers of other wireless carriers as well by eliminating a low-cost carrier from the market and reducing the competitive pressure on other companies to lower prices.
UScellular stands by its earlier statement that the deal will offer more competitive choices for its customers as they will benefit from T-Mobile‘s vast resources and ability to offer lower prices, improved experience, and better plans.UScellular is one of America’s last major regional wireless operators and provides service to rural customers in 21 states. It was put up for sale last year by majority owner Telephone & Data Systems shortly after it reported lower-than-expected second-quarter earnings.
Since T-Mobile is acquiring UScellular through a split-sale structure, regulators might let it go ahead as the deal might not harm competition in the same way as a complete takeover. On the other hand, customers are growing increasingly frustrated with the company but whether this will have any effect on the decision remains to be seen.
UScellular had previously said that integrating its operations with those of T-Mobile would allow it to continue to deliver on its mission. T-Mobile insisted that UScellular customers would be better off with T-Mobile as a switch would allow them to “save hundreds of millions of dollars combined annually.”
The deal is expected to close in mid-2025.
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